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October 12, 2004
Can We Keep Up With Technology Countermeasures?
Topic: 4) A Random Walk
I read the following interesting news on SPAM and spyware ...


"In what could prove to be one the great second acts in Internet history, erstwhile king of spam Sanford Wallace takes center stage this week as exhibit A in a federal crackdown on invasive online advertising software."


"In the first action of its kind, the agency last week filed a civil lawsuit against Wallace, charging the admitted former junk e-mailer with fraudulently installing advertising and other software on consumers' computers through his network of Web sites. "


"'Very much like with spam and the spam legislation last year, spyware can be fought through a combination of efforts: enforcement, legislation, technology and consumer education,' said Dave Baker, an attorney for Internet service provider EarthLink, which has been an active participant in anti-spyware efforts."
source



I applaud Baker's efforts, but I wonder about the age we live in today where:
- computer viruses block anti-virus programs from reaching data updates for new viruses,
- teenagers are smart enough to hack into security measures developed by PhDs, mathematicians, and cryptographers in less than 15 minutes,
- SPAM email has overtaken the Internet (albeit CAN-SPAM legislation hasn't been around that long),
- telemarketers and telefaxers still contact my residence after repeated unsubscribe and subscriptions to do not call lists,
- venture capitalists and companies like Google are investing in blogging technologies for various reasons, some of which include because email is so cluttered by garbage,
- people are migrating off of the PC platform to the Macintosh to get away from the computer virus nightmare,
- and the beat goes on ...


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com


Posted by sshu-s4 (c) S4 Management Group LLC at 10:55 AM CDT
Updated: October 12, 2004 11:05 AM CDT
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October 7, 2004
26,324,627 Downloads of New Technology
Topic: 4) A Random Walk
One of my past colleagues at the management consulting firm PRTM pointed out to me a cool technology by Skype. It is a P2P telephony company enabling free, superior-quality calling worldwide. I'm generally not an early-adopter when it comes to actually using technologies (although I know some of the S4 Management Group blog readers are), but what really caught my attention was the roots back to KaZaA and the quote by the Chairman of the Federal Communications Commission.


"I knew it was over when I downloaded Skype," Michael Powell, chairman, Federal Communications Commission, explained. "When the inventors of KaZaA are distributing for free a little program that you can use to talk to anybody else, and the quality is fantastic, and it's free - it's over. The world will change now inevitably."
Fortune Magazine, February 16, 2004
About Skype


Don't know what the conversion rate to users is on the 26-some million downloads. Last I remembered stats on the instant messaging space ... well, it wouldn't surprise me if Skype had a total user base on the order of the pure-play, instant messaging platforms even lacking first-mover positioning and even given some of the tricks of getting the end-user, customer premise equipment in place.


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com


Posted by sshu-s4 (c) S4 Management Group LLC at 10:55 AM CDT
Updated: October 7, 2004 7:14 PM CDT
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October 6, 2004
On the General Manager
Topic: 1) General Management
I was leafing through my copy of "Process Consultation (Volume II)" by Dr. Edgar Schein, Sloan Fellows Professor of Management in the Sloan School of Management at the Massachusetts Institute of Technology (Edgar Schein website) ... I find it useful to review core foundation works from time to time.


In any case, in that book Dr. Schein summarizes the role and relative position of general managers very well. He writes, "As for general managers, whose responsibilities cut across the various business functions and who manage complete organizational units, in many functions the subordinates are often each more expert than their boss. It is in such situations, where the boss's job is to integrate, coordinate, and blend the expertise of others for coherent decisions, that the skills of helping become most relevant. Such decision processes often occur in groups or involve the interaction of a number of people whose contribution must be orchestrated."


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com


Posted by sshu-s4 (c) S4 Management Group LLC at 9:58 PM CDT
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October 1, 2004
What Makes A Good Manager
Topic: 1) General Management
Mark Cuban, self-made billionaire and owner of the Dallas Mavericks, made this comment to me about good management (very deft response from Mark I might add - smart guy) ...

/*** begin email thread ***/

He asks questions the right way

On Thu, 30 Sep 2004 12:01, MAV Feedback wrote:
>
> IP: 129.119.85.141
> Name: Steve Shu
> Email: sshu@s4management.com
> URL: http://www.s4management.com/
> Site: http://www.blogmaverick.com/
>
> Mark,
>
> Recently relocated to Dallas about 7 weekes ago, and I just learned
> about your site. Saw Terdema give a recent talk at an SMU Cox School
> of Business function
> (index.blog?entry_id=455445).
>
> Terdema said that you communicate very little via email with him. He
> said you mostly give answers like "yes", "no", or "do it" to him. Yet
> your blog is packed full of stuff. What's going on? (He spoke highly
> of you as a manager though - for the record.)
>
> ;)
>
> Best Regards,
> Steve Shu
> Managing Director
> S4 Management Group
> Mobile: (773)320-5527
> Email: sshu@s4management.com
> Web: http://www.s4management.com
> Business Blog: https://sshu-s4.tripod.com/blog
Check out The Benefactor on ABC Monday nites !

Thx

m

/*** end email thread ***/



Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com


Posted by sshu-s4 (c) S4 Management Group LLC at 1:01 AM CDT
Updated: October 1, 2004 10:09 AM CDT
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September 30, 2004
Entrepreneurs and Finding the Right Balance of Marketing and Sales Operations
Topic: 3) Ventures
Two recent articles and a couple of sales and marketing meetings related to eCommerce and software businesses led me to write this blog entry. In the first article I read, comments were made that even companies like McDonald's are having trouble getting their marketing dollars to rise above the nit. In the second article, Phillip Kotler (marketing academic and guru) characterized the world as still using old marketing concepts. He went on to mention that companies haven't yet figured out how to combine technology with high-touch marketing. Kotler's core point was that businesses don't spend enough time 1) getting a map of the customer's mind and 2) mapping back how a company's processes and operations should be optimized about customer awareness, preference, and choice. In any case, both articles touch on getting through noise and the relationship of customer prospects with business operations.


Now entrepreneurs are generally very concerned about marketing and sales so this is not new news. However, I often find that entrepreneurs are often stretched and need to make choices quickly. Based on a typical psyche of entrepreneurs where they are more inclined to try to maximize all resources at their disposal as opposed to taking a trustee's primary orientation of protecting assets, well this just fuels the need to make quick, and sometimes improper, decisions.


Where things can go awry is in the implementation of marketing and sales operations, and I'll only address two activities for brevity: cold calling and networking. A popular saying is that networking is the most effective way to generate sales. While I think this is true, I think that such thinking ignores some underlying core concepts. Better understanding the core concepts is helpful because a spectrum of marketing and sales techniques may be used in an organization.


On one end of the spectrum, cold calling operations are generally better for those types of offerings that are more commoditized, common, and well-defined. Cold calling operations are also better for those cases where the customer's problems are not that confidential. Thus, as you can imagine, since customer prospects can be contacted at any moment by telemarketers (aside from do not call regulations), if the prospect has a common and well-defined problem, there is very little risk to having an unknown, telemarketer give the sales pitch to them.


On the other end of the spectrum, problems of an infrequent nature and with a confidential slant to them (e.g., merger integration, company turnaround, new business launch) - these types of problems are better matched to sales and marketing processes involving networks. Use of networks and trusted people are the people that get invited to the party. Since problems faced by customer prospects are more confidential and infrequent, networks serve as feelers into the marketplace for suppliers.


So this is just another way of thinking about sales and marketing. At which end of the spectrum do your products and services sit? Do you have multiple products that require different operations? Does a blend apply? What should the balance be?


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com



Posted by sshu-s4 (c) S4 Management Group LLC at 11:04 AM CDT
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September 29, 2004
Technology Innovations in Healthcare
Topic: 4) A Random Walk
Today, I saw an article entitled "Device to save hospitals billions". The article goes on to say, "CHRISTCHURCH, New Zealand (CNN) -- Imagine a computer program so clever, it senses the level of pain a patient is in and measures the exact amount of pain relief and sedative drugs they need." Source: http://www.businessweek.com/technology/content/aug2004/tc2004089_3601_tc024.htm


As a management consultant, I think the billion dollar market is too limiting. It seems like there should a great opportunity to hook this up to entrepreneurs, academic researchers, business executives, and the like who need some instant pain relief every day.


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 9:32 PM CDT
Updated: September 29, 2004 9:34 PM CDT
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September 27, 2004
Note on the Perimeter of General Management Consulting
Topic: 2) The Consulting Trade
I've authored a short business note entitled, "A Note on the Perimeter of General Management Consulting". Hope it helps some folks to learn more about the profession!
*click here*





Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 12:01 AM CDT
Updated: September 27, 2004 12:01 AM CDT
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September 26, 2004
We May Be In For a Bumpy Ride ... Calling All Leaders!
Topic: 4) A Random Walk
Brad DeLong, author of an extensive blog on economics, posted the following chart on the federal deficit:



(original post)

When I think about this juxtaposed against the Washington Post's article breaking about 45 minutes ago on regulating Fannie Mae (article) and probably the cost of all of the other programs that may be on the table ... well I've never done controller work for something the size of the federal government, but all I can say is that this is "THE" right time to make sure that leadership, financial analysis, and execution come together. I am not sure what management assumptions DeLong used to project out the financial deficit, but I hope that someone is paying attention.


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com



Posted by sshu-s4 (c) S4 Management Group LLC at 11:47 PM CDT
Updated: September 28, 2004 8:49 PM CDT
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September 23, 2004
The Moment You Think You Are Doing Everything Right ...
Topic: 1) General Management
This afternoon I had the pleasure of seeing Terdema Ussery speak as part of the Cox School of Business Management Briefing Series. Terdema is the President and CEO of the Dallas Mavericks and the CEO of HDNet. Great speaker.


One of Terdema's comments really rang true with me. When sharing some perspectives on business management, he said something to the effect of "The moment you think you are doing everything right is the moment you are doing something totally wrong." I couldn't agree more, as such a type of mindset is reflective of people looking for confirming evidence only and ignoring disconfirming evidence. But apart from looking for disconfirming evidence, there is another way I have seen to promote a constructive business operation. Such an approach involves calculated experimentation and risk-taking, even in mature business environments and even in cases where one is already "winning". If anything, one can always place one or more calculated bets. Who knows? One might get some positively surprising results.


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 12:31 AM CDT
Updated: September 23, 2004 12:44 AM CDT
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September 20, 2004
Blogging for Business (BusinessWeek Online)
Topic: 4) A Random Walk
Well I thought that I would try to memorialize my place in history as one of 20,000 early adopter bloggers in the business community. Below I reference an August 2004 article from BusinessWeek Online, entitled "Blogging for Business".


http://www.businessweek.com/technology/content/aug2004/tc2004089_3601_tc024.htm


Although there are a lot of well-known business personalities cited in the BW article, as a person with both engineering and business backgrounds, I think that the world is yet to see blog authoring and management software that will truly revolutionize the potential of blogging. Revolution will be apparent by accelerating adoption rates and catalyst technologies that make end user design easier, functionality robust, and integration rich. Software vendors and companies that use vendor technologies that view content management, customer relationship management, and marketing systems in traditional ways better beware of getting blindsided. The blogging area is fertile ground for innovative and disruptive technologies.


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 10:47 PM CDT
Updated: September 23, 2004 12:46 AM CDT
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September 19, 2004
Overestimating Equity
Topic: 3) Ventures
In a number of different discussions I have been having regarding bringing technologies to market, hiring new executives in early-stage ventures, and determining the proper capital structure for a business, I run into situations that remind me of a classical finding in the organizational behavior field of study that I learned while attending the University of Chicago business school. For example, when a husband and wife are asked individually "what percentage of the housework do you perform in your family?" a general finding is that the two numbers significantly sum to more than 100% (e.g., husband says he does 70%, wife says she does 80%).


I find the same type of overestimation tendencies occur in start-ups and with new inventions, where quantifiable value in dollars may be very hard to pin down to a single number or even a narrow range. This value discrepancy can occur throughout all assets in the business between insiders, outsiders, classes of investors, functional roles, etc. People tend to overestimate themselves and underestimate others. While there are external ways to mitigate the counterproductive aspects of overestimating oneself (e.g., use of Board processes, benchmarking), one should be cognizant of complex costs imposed on early-stage ventures to resolve these differences. Sometimes external controls may not be the only thing to look at.


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 9:21 PM CDT
Updated: September 20, 2004 9:54 PM CDT
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September 16, 2004
Calibrating the Value of Management Consultants
Topic: 2) The Consulting Trade
The topic of tracking the value of management consultants is fertile ground for many jokes. Ever hear the joke about the consultant using the client's watch to tell the client the time? On a serious note though, management consultants need to provide value that exceeds their "costs" (although the same standard could also be applied to employees within a firm). Outlined below are just a few perspectives for looking at the problem of setting and calibrating the value of consultants.


1) The Consultant "Rule of 10x" - In goal setting, good consultants are trained to aim for problems where solutions will yield value exceeding ten times their cost in professional fees (e.g., cost reduction, revenue growth, market capitalization). This provides a way of ensuring that the consultant and the client are aligned at the start of the engagement (and ongoing communication and updating should occur throughout the engagement). If after execution the client achieves a return of 10x or more, this is fabulous. If 5x, this is still great. Even 3x, 2x, etc. are also acceptable returns. That said, those that apply the Rule of 10x are thinking along the right lines.


2) Strategic Need - Sometimes the value of using management consultants can be viewed as a one-time cost to achieving a strategic goal. For example, executive management may say that it is worthwhile to incur $1M in consulting costs to integrate two businesses at an operational level. As another example, management may say that it is worthwhile to spend $500K to project manage the rollout of a new line of business and avoid extinction in the marketplace.


3) Running Versus Changing a Business - There are many circumstances where change management is needed. It is sometimes very difficult for those running a business to have sufficient bandwidth to both change a business and create all of the necessary tools, processes, organization, and infrastructure at the same time. The value of consultants can sometimes be looked at as a means to get over these hurdles, and good managers will recognize the potential costs of getting over a hurdle.


4) Assessment and Inventory - Sometimes third-party perspectives are simply needed to provide a fresh look at the business and to provide assessments of where things are at. Management consultants can be used to inventory, diagnose, and analyze where a company is at. The value of these types of services can be estimated by looking at comparable costs of other firms.


Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 4:14 PM CDT
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September 15, 2004
Management Consulting Humor
Topic: 4) A Random Walk
Had to reprint this one (by Bernie Ramsbottom of the Financial Times on April 11, 1981):


"Of all the businesses, by far
Consultancy's the most bizarre.
For the penetrating eye,
There's no apparent reason why,
With no more assets than a pen,
This group of personable men
Can sell to clients more than twice
The same ridiculous advice,
Or find, in such a rich profusion,
Problems to fit their own solution."


Steve Shu, Managing Director, S4 Management Group
sshu@s4management.com
http://www.s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 10:00 PM CDT
Updated: September 15, 2004 10:12 PM CDT
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September 14, 2004
Notetaking: Bread and Butter for Managers and Consultants
Topic: 1) General Management
Note taking is a topic that I wanted to write about for a long time because it is not only a highly underrated task but also a bread and butter skill of mine. I have received many positive comments on my note taking skills from colleagues, lawyers, investors, customers, and other professionals. Many have even commented that I well earn my pay just on note taking. Note taking is very applicable to general management, consulting, sales, due diligence, interpersonal communications, and facilitation. Here are a few, overlooked golden benefits of note taking:


1) Taking good notes provides a foundation for making better decisions. Why? There is less possibility for selective filtering and recall of information. Managers have a tendency to remember what they want to hear about what's going on in their business. Same mistakes can be made by consultants too, but a good consultant should be trained to be unbiased and to listen to facts (while documenting the rest too).


2) Taking good notes enables a manager or consultant to engage all types of people in an organization. In a popular personality test known as Myers-Briggs (M-B) typing, one of the dimensions of evaluation is whether a person is an (E)xtrovert or (I)ntrovert type. A common misunderstanding of the term of "extrovert" is that it refers to social butterfly types, people that are outgoing and talkative. Similarly a common misunderstanding of the term "introvert" is that it refers to those that have tendencies to crawl into holes when people come around. While this may be true in common English, roughly speaking, the E and I designations for M-B refer to whether a person is energized by actively thinking about information in the open (Extroverts) or process information internally as their normal mode of operation (Introverts). Bringing it back to note taking, written notes help to engage introverts in the company while providing a script for engaging the extroverts (who actually tend to think out loud). If you engage a person using the wrong channel, you may not get the message across at all.


3) Taking good notes can be dovetailed with editorial comments that drive action and change. There is a fine line between being a secretary (accurately documenting what has happened) and being a change agent. Managers and consultants need to be able to do both. Accurate documentation is required for one to be ethical and to drive unbiased decision-making. However, there is also an important power of the pen. How things are framed, played back, portraryed against business value, etc. can influence what actions come next by an organization.




Steve Shu, Managing Director, S4 Management Group
sshu@s4management.com
http://www.s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 10:43 PM CDT
Updated: September 14, 2004 10:51 PM CDT
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September 7, 2004
Applying "Regret" Concepts for Better Decisions
Topic: 1) General Management
Ever wonder how you can leverage the pessimist in you to make better decisions? As a practicing management consultant, I'm focused on facts, quantitative information, benchmarks, leadership, and results. I generally say "pooh-pooh" to everything else. However, there is an important soft side of me that relies on gut feel a bit and sanity checking.

This soft side of me instinctively uses a concept of regret to help ensure broad possibilities are considered, especially when one is at a crossroads. For example, suppose one has converged on making one of two choices that are diametrically opposed and that once the path is chosen, there is a point of no return (e.g., selling off intellectual property of the company or choosing a penetration pricing strategy). Before one commits to the choice, one should ask, "Am I going to regret this decision?" Hopefully, what will be triggered in one's mind will be a process that makes sure that one is looking at the decision from many different angles. For example, one may decide that additional experiments are needed to validate original thinking ("am I going to regret not running additional experiments or will I be able to sleep at night if I commit now?").

In any case, forcing oneself to look at all alternatives by posing key questions of regret can be used in a positive way as a means to strengthen commitment and resolve as opposed to killing momentum. After having considered regret, one should feel better after making a decision, neither worse nor more confused. At least this is one method that helps keep me on track and able to sleep well at night when making tough decisions.

Steve Shu, Managing Director, S4 Management Group
sshu@s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 10:50 PM CDT
Updated: September 7, 2004 10:59 PM CDT
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September 5, 2004
Applying Operations Theory to Early-Stage Ventures (Part I)
Topic: 3) Ventures
Early-stage ventures frequently have dynamic and demanding environments. Aside from the technical aspects of corporate governance and executive management, a key question for operating managers in a venture is who is going to do what by when (the 3Ws).

While this goal-driven perspective is important, I also find it useful to draw analogies and apply operations concepts such as those illustrated in the popular business novel by Eliyahu M. Goldratt and Jeff Cox, "The Goal". In that book, the reader is essentially introduced to having to increase the output of a manufacturing plant, a foreign environment to most readers. One concept introduced in the book to solve the problem is to try to figure out where the bottleneck is and to alleviate the bottleneck, e.g., by increasing processing capacity at the point of the bottleneck, to increase throughput.

I find the bottleneck concept to very important for early-stage ventures, especially since there may be little margin for error in the venture and since response times are so critical. Sometimes the bottleneck is sales prospecting or lead generation. Other times, it has to do with insufficient marketing collateral or capital. Managers in early-stage companies need to look at problems using multiple frameworks and methods so that they can not only remove bottlenecks but also recognize them. I suggest that using principles of operations can also help as even experienced managers in early-stage ventures will find themselves in new, foreign environments like the main character in "The Goal".

Unfortunately, removing a bottleneck can create a bottleneck in another area (shifting bottlenecks). If companies didn't have enough things to worry about! Well, we'll save that for Part II.


Steve Shu, Managing Director, S4 Management Group
sshu@s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 11:17 PM CDT
Updated: September 6, 2004 7:35 AM CDT
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September 3, 2004
Interim Management and Auditioning
Topic: 2) The Consulting Trade
The term "interim management" connotes different things to people. Some view it as a niche separate from consulting where the interim manager takes responsibility for a particular aspect of the business for a short period of time. Others view interim management positions as turnaround-type positions for a firm.

Rather than define the term, I think its useful to view interim management in terms of fitting a role to the need at hand and minimizing side effects. On the one hand, a good purpose of interim management could be to bring in world-class resources immediately. One the other hand, a tendency may develop to make the company overly dependent on an interim manager like a crutch.

I have been involved in cases where an interim manager is used in conjunction with the immediate process of placing a permanent manager. If designed properly, such a structure can yield excellent results including faster time-to-market, creative tension, and a coaching and supportive environment for the prospective permanent hire. If the prospective permanent hire in mind does not work out, senior management can use the auditioning period as a means to determine what to do next, e.g., move the team players around a bit, let the evaluation period for the permanent hire go longer, or work with the interim manager more actively to get the permanent hire on track.

Steve Shu, Managing Director, S4 Management Group
sshu@s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 11:51 PM CDT
Updated: September 4, 2004 7:22 AM CDT
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September 2, 2004
On the Air
Mood:  a-ok
Topic: 1) General Management
This blog complements the S4 Manangement Group website at http://www.s4management.com. The blog will serve as a dynamic place to capture perspectives from S4 Management Group consultants and invited partners.

Initial topics will center around aspects and tricks of the trade that I've found few people make accessible for more general consumption. The initial topics are:
    i) General Manangement
    ii) Consulting Trade
    iii) Early-Stage Ventures
    iv) Business Templates
Please feel free to post your feedback or send the authors comments. Thanks for tuning in!

Best,
Steve Shu, Managing Director, S4 Management Group
sshu@s4management.com

Posted by sshu-s4 (c) S4 Management Group LLC at 1:01 AM CDT
Updated: September 18, 2004 10:18 PM CDT
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